China Plays U.S. in Great Power Game

[Edison Chen]

Africa has long been a battleground for world powers. Two giants playing there these days are China, which is spending freely throughout the continent to scoop up resources and tap some of the world’sfastest-growing economies, and the U.S., which is looking to do more business. Both Chinese and U.S. companies expect to profit from their African stakes. The question is whether Africans can win, too.

The Situation

China’s investments in sub-Saharan Africa have grown 40-fold since 2003 and its state-owned enterprises have been able to roll out projects quickly and in every country on the continent, primarily building things like hydroelectric dams on the Nile,highways to oil regions and railways to carry iron ore. After complaints that China was becoming another colonial overlord, China’s government and the African Development Bank committed $2 billion to a fund designed to help African companies win Chinese contracts. While Chinese companies have been criticized for importing Chinese labor rather than training and employing Africans, they are now building garment manufacturing plants to take advantage of Africa’s cheap labor amid high unemployment. U.S. development in Africa has been private-sector driven and concentrated in just a few countries including Liberia, Mauritius and South Africa. President Barack Obama wants American companies to do more. In 2013, the U.S. began the Power Africa initiative to build electricity grids and generators across six countries by working with African companies and U.S. partners that have top-of-the-line technology, including General Electric, and offering $7 billion in financial support and loan guarantees. More deals are expected to be announced this week at the U.S.-Africa Leaders Summit in Washington.

The Background

European imperialism left deep scars in Africa. During the Cold War, the U.S. and Soviet Union intervened to put dictators in power who lined their own pockets and left legacies of poverty, famine andconflict. Foreign aid was often misused and diverted for weapons. Food aid imported to combat famines depressed prices for local farmers. Unrest led to little investment in infrastructure; even now about 600 million sub-Saharan Africans — about 70 percent of the population — lack electricity. Though Africa is rich in minerals and energy sources, few Africans have benefited from exports of those materials. Some economists and policymakers have even argued that dependence on natural resources does more harm than good — a phenomenon they call “the resource curse.”

The Argument

China’s rapid-fire, state-funded building provides quick fixes to pressing infrastructure needs in Africa, though some critics say construction can be shoddy. China also isn’t fussy about working with controversial political regimes, bestowing legitimacy on leaders in countries that U.S. companies won’t touch. Though it sometimes pays little heed to the political and environmental impact of its investments, China’s government has stepped in when its investments were threatened — as it did in South Sudan — and thus could help promote calm. While the U.S. is trying to use development as a way to shore up regional stability, its investments can take longer to get the jobs done, since companies have to satisfy shareholders and projects often undergo environmental vetting before they can get off the ground. U.S. companies are also subject to anti-corruption laws that make it almost impossible to do deals in places where bribery is common. U.S. and Chinese investments in transportation and electricity should make it easier for African businesses to get goods and services to and from the continent. African planners hope this will help lift the average per-capita income past $10,000 in many countries in the next three decades.

Into Africa - QuickTake

 

[TaiShang]

Very nice. Kick out the Yankees from every political economic sphere possible.

***

China's help needed for bright African future
By Mark Kapchanga

Illustration: Liu Rui/GT


Once upon a time, Africa's people existed as a community under the solid leadership of their kings. Those were the peaceful days when Africans would move freely from one region to another without boundaries.

Communities intermarried and goods were exchanged for goods and services in the legendary barter trade. In some instances, cowrie shells were a means of exchange.

These nostalgic days were swept away by the established empires, notably Britain, Portugal and France, who claimed for themselves vast areas of Africa. The once stable and cohesive continent was carved up. People were identified by their tribes.

It is because of this partitioning that the continent is today immersed in unimaginable instability that now threatens its future.

Upon the exit of colonialists in the 20th century, Africa struggled to regain its footing, repairing the massive damage left behind by the Europeans.

Some countries like Ghana, Kenya, Zimbabwe and Malawi came out quite strongly, investing in healthcare, education, governance and infrastructure.

Through these critical ingredients of development, Africa recorded steady and strong growth, prompting the IMF to of late tag it the rising continent.

There's no doubt that Africa's economy is on the rise; more than 67 percent of the countries in the region have enjoyed more than a decade of uninterrupted growth, with literacy levels rising and infant mortality declining.

Thriving Chinese investors have connected African countries with roads and railway lines. Now, the long-delayed dream of Africa trading with itself is increasingly gaining momentum.

For instance, the volume of trade between East African countries increased by 22 percent in 2012, from $4.5 billion to $5.5 billion.

And it is not just intra-African trade that is increasing in value. Africa's share of global foreign direct investment has also grown over the past five years, providing homes to global brands like Lenovo, Google and Apple.

It appears, however, that these growth prospects may not be sustainable, as Africa has become analogous with insecurity.

While political instability has been an enduring feature of the post-colonial landscape in Africa, the current uncertainty is on a scale never seen before.

Today, virtually every part of Africa is insecure. Even the wife of Cameroon's vice prime minister was recently kidnapped by the Boko Haram militia, as the world marked the 100-day mark since the Nigerian militants abducted 267 schoolgirls.

In the meantime, Libya's transitional government is struggling with armed militias, and Somalia is overrun by rebels and pirates, while across the border, Kenya is hit by a barrage of grenade attacks. In Uganda, Joseph Kony, the leader of the Lord's Resistance Army, a guerrilla group, is still on the run.

It is imperative to mention that insecurity is not a new thing in Africa. But African leaderships prefer to treat its symptoms rather than the causes, an indication that the challenge is likely to persist in African nations.

A number of structural issues need to be overcome before the continent can fully take advantage of increasing foreign investment, driven particularly by China.

By the end of 2009, 45.7 percent of China's cumulative foreign aid had been given to countries in Africa. China has been Africa's biggest trade partner since 2009.

China-Africa trade stood at just under $11 billion in 2000. By 2006, this figure had increased to nearly $60 billion. In 2013, bilateral trade soared to $210 billion, while Chinese investment in African countries has risen some 30 fold in the past decade.

In 2013, China pledged $20 billion in loans for infrastructure development.

Now, these achievements risk going up in smoke if the continent does not find a lasting cure to its ailing security situation.

Certainly, Africa's dynamic security environment is characterized by great diversity such as insurgencies, violent extremism, organized crime, and resource and identity conflicts.

Authorities must appreciate that the engines of stability in any economy are transparency, accountability and law-based governance.

The guiding principle to this must be no-one-size-fits-all.

In addition, historical inequalities must be addressed. The persistent security dilemmas in many parts of the continent have been exacerbated by discordant development, which has conveyed not only unequal development but deepening inequalities and rapid progress. These are juxtaposed with collective distress that has generated violent conflicts in countries such as Kenya, Nigeria and South Africa.

With all this in mind, it is important to see Africa as a young child in the family who needs guidance and support. The international community should step in and help.

China has led the way by refusing to bow down to pressure from developed economies to issue travel advisories to its citizens visiting some countries in Africa.

China has also provided resources to help modernize the continent's security apparatus.

The author is a journalist on African issues based in Nairobi, Kenya. mkapchanga@gmail.com

 

[eazzy]

Good.

 

[BuddhaPalm]

Let the Americans get ebola.